Poverty rate climbs, median income drops

Democrats attack Bush on economy

For Immediate Release:

September 27, 2003

Contact:Wayne Washington

The Boston Globe

WASHINGTON -- Poverty increased and household income dropped for the second year in a row last year, the Census Bureau reported yesterday, prompting leading Democrats to blast the Bush administration for its handling of the economy.

The White House, defending the administration's tax cut policies, responded by highlighting another economic indicator released yesterday that showed better-than-expected growth in the second quarter of this year.

About 1.7 million more people fell below the poverty line last year, bringing the total number of poor in the country to 34.6 million. The poverty rate edged higher than 12 percent for the first time in five years, rising to 12.1 percent from 11.7 percent. It was the first time in a decade that the number of poor people has increased for two straight years. More broadly, median household income dropped 1.1 percent between 2001 and 2002, to $42,409.

A shower of criticism from Democrats in Congress, liberal policy groups, and union members cited the poverty and income figures as evidence that President Bush's policies have been ineffective.

"This troubling development should be a wake-up call to the White House that it's time to reverse course on the economy," said Senator Edward M. Kennedy, Democrat of Massachusetts. "If the administration can find $87 billion for Iraq, surely resources can be found to create new jobs for the millions of Americans hurt by the failing economy."

White House officials said the poverty numbers reflect the fact that the country has been through a recession and has suffered from high unemployment. They said a slightly higher estimate of growth from April through June points to better days ahead because of the tax cuts that Bush signed into law earlier this year.

"The president acted," White House spokesman Scott McClellan said. "He led, and he acted, and we passed those tax cuts to get more money back into people's pockets so they can spend it on a good or a service. The economy is growing. And as the economy picks up even more steam, the economists will tell you then that creates an environment for job creation."

The Commerce Department reported that the gross domestic product, the value of the country's goods and services, grew by 3.3 percent during the second quarter of this year, beating an earlier estimate of 3.1 percent.

During the second quarter of last year, the GDP grew by 1.3 percent.

But the expanding economy has not produced jobs. Figures from the Labor Department show that 2.7 million jobs have been lost since Bush took office, increasing the prospect that he will be the first president since Herbert Hoover to preside over a net loss of jobs.

"Americans have listened for three years to President Bush's lofty promises of economic prosperity and `robust growth,' while he dismissed the three million jobs lost under his watch as a `short-term problem,' " said Representative Steny H. Hoyer of Maryland, the second-ranking Democrat in the House. "But increasing poverty and decreasing opportunity is not a problem easily dismissed. The policies pushed by the Bush administration and Republicans in Congress have been breathtaking only in their failure to improve the lives of average Americans."

The costly and increasingly deadly conflict in Iraq and the unprecedented job losses at home have been political millstones for Bush, whose job approval ratings have dropped to the lowest levels of his presidency. On economic policy, he is wedged between conservative supporters who say he has been too willing to countenance increased spending on a myriad of government programs and Democratic critics who rip him for pushing tax cuts.

"I'd like to hear President Bush explain to all the single mothers with kids living in poverty how his tax breaks for the rich are helping them," said Senator John Edwards, a Democrat of North Carolina who is a candidate for the party's presidential nomination.

Christine Iverson, a spokeswoman for the Republican National Committee, said American voters would not fault Bush or members of his party, because their policies kept the 2001 recession from dragging on longer.

"People see that the president and the Republican Party have taken action to create jobs and stimulate the economy," Iverson said.

During trips to swing states in the 2004 presidential race such as Michigan, Pennsylvania, and Ohio, Bush has touted tax cuts as the spring that will launch an economic recovery, generating enough growth to wipe out the job losses and cut the ballooning budget deficit in half over the next five years.

Yesterday, his aides said much more is needed to help the economy expand further.

McClellan said that the tax cuts should be made permanent, and not repealed as many Democrats have proposed, and that Congress should restrict damage awards in liability suits, streamline regulations, and pass Bush's energy plan.